Irish universities generate more start-ups than US counterparts

In terms of outputs from research, Irish universities are generating more start-ups than their US or UK counterparts, the head of Invent DCU Richard Stokes told Siliconrepublic.com.

On Monday, Invent DCU will be celebrating 10 years in existence. Stokes, who took over the running of the Invent Centre from Dr Tony Glynn five years ago, says Ireland is punching above its weight in delivering on its investment in developing its scientific and technological landscape.

I ask Stokes if Ireland’s investment in science is going to help change the business landscape to include innovative, home-grown companies that will deliver employment and revenue.

“At the moment there are up to 80 high-potential start-ups (HPSUs) from all the various sectors, of which 20 come from the higher-education sector. Between us and the various universities and institutes we’re committed to creating the circumstances that will generate more HPSUs.

“The key is to ensuring the academics engage with business people in an engaging way and that business people also understand the pressure on academics to stay on top of their game, to be the best in the world and gain recognition.

“Obviously, you can’t turn universities into factories but we can provide access to innovation to help entrepreneurs and existing businesses add value, innovate and generate opportunities in a way they couldn’t afford to in the past.”

Stokes cited Enterprise Ireland’s Innovation Partnership Scheme, which provides an incentive for small companies to interact with universities, as one of the best in its class internationally.

He says the Invent DCU Centre acts as a bridge to ensure that academic research programmes are informed by the needs of industries. “We work with indigenous companies to ensure that programmes are commercially focused and that there’s a higher chance of outcomes from innovation.”

The journey of innovation to profit

Stokes says that typically the journey of any innovation is longer than 10 years and there is a danger that decision makers could lose the nerve and cease to invest in Irish research.

“The great American universities have analysed how long it takes for research to flow into viable operations and that can take more than a decade. Clearly, the Irish Government has looked at what’s required and the recent capital budget allocations to Enterprise Ireland demonstrates that commitment.”

Stokes says that the average cost to spin a company out of research in Ireland is US$20m whereas in the US it requires an investment of more than US$50m to generate a spin-out.

“In terms of outputs from research, more start-ups are generated in Ireland than the US. In terms of licences per US$100m of investment, we are generating more licences than the UK or the US.

“The ultimate question is how do we get indigenous companies to scale-up, become international and high-tech and stay in Ireland to create a long-term future for our children and grandchildren?

“This is all dependent on the can-do attitude of entrepreneurs, the availability of venture capitalists and dealing with the cautious attitude of banks. It’s a complex task.

“The venture capital environment has changed positively, unfortunately, the dilemma is where is the working capital for companies going to come from? Firms can raise seed capital but not working capital and that’s a real shame.”

Stokes, who has been a founder of four start-ups, feels passionate about start-ups and says no one should underestimate the tension and stress of running a start-up.

“Anybody with the courage to start a company in Ireland today needs every support and incentive,” he says.